Three ways to reduce poverty amongst working age adults

The Joseph Rowntree Foundation and Bevan Foundation’s review of ‘what works’ to reduce poverty is generating some valuable ideas.  Ways of reducing poverty amongst working age adults are featured in this article, for discussion and debate.

Nearly one in four adults in Wales (24%) lives on a low income, a proportion virtually unchanged since the mid 1990s. What has changed is the marked increase in the proportion of adults in poverty where one or more members of the family is in work, with adults in working households now comprising the majority of those in poverty.

The evidence highlights that a pre-requisite for reducing poverty is a stable and growing economy and a fair tax and benefits system. While the Welsh Government does not influence UK economic trends or fiscal policy, it can do a great deal through its own economic development strategy, which should, as the Assembly’s Communities, Equality and Local Government Committee recommended, be closely aligned with efforts to reduce poverty.

1.  Moving into Work

Movement of unemployed people into work has been a focus of government policy for many years, yet has low rates of success. The success rate for young people and people with characteristics that make job entry difficult (e.g. disability, long-term health conditions or poor skills) is particularly low.

JRF’s review of evidence points to an active labour market policy that addresses the very varied circumstances of job seekers, from those who are job-ready to those who are some distance from the labour market, with different pathways of support and sanctions. While many elements of the suggested approach are not devolved (e.g. unemployment benefits and the Work Programme) others are within the Welsh Government’s remit (e.g. additional support for job seekers, skills and training).

Emerging recommendations envisage a ‘whole system’ approach which would include refocus or replace the Work Programme with one which focuses on the reduction of poverty and is tailored to the distance of a job seeker from the labour market.  Because of the close relationship with devolved responsibilities for skills and training there would be merits in the Work Programme (or its successor) being devolved to the Welsh Government.

The Welsh Government could:

• establish its own ‘moving into work’ strategy, in which the Work Programme or its successor is a part;
• ensure provision is tailored to the very different needs of individuals, from young, job-ready but unemployed graduates to young people not in education, employment or training and with no or low qualifications, to people who are some distance from the labour market e.g. because of disabilityor a health condition;
• focus the strategy on reduction of poverty not just moves off benefit / into work.

2.  Getting on in work

Progression in employment is key, but the changing shape of the labour market means that routes into better skilled and paid work are increasingly absent and training for people aged 25+ has declined sharply.

Evidence suggests that the Welsh Government could:

• establish a ‘progress at work’ framework to increase access to training and learning amongst over 25 year olds;
• provide learners with a personal training budget, financed by employers, the government and European funding.

3.  Better quality work

Many of the main levers are not devolved – the evidence that exists suggests that the Welsh Government could:

• actively promote the adoption of the Living Wage;
• support the development and improvement of job quality through innovation and increased productivity in key low-skill and low-paid sectors such as retail and social care;
• implement the ‘one in a £1m challenge’ in all public procurement, in which one year of work-with-training for a young or marginalised person is required for every £1m in contract value;
• work with others to increase take-up of in-work benefits.

The recommendation of the Assembly’s Communities, Equality and Local Government Committee that procurement and conditions on grants be used to improve job quality is also important.

For the full report on the emerging findings, please visit our publications page.

To find out more about what we are doing on poverty, check our projects page.

To keep up-to-date with all our work, sign up to our monthly e-newsletter. 

Victoria Winckler is Director of the Bevan Foundation